FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(x) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 2000 Commission File Number 0-21104
CRYOLIFE, INC.
(Exact name of Registrant as specified in its charter)
---------
Florida 59-2417093
(State or Other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1655 Roberts Boulevard, NW
Kennesaw, Georgia 31144
(Address of principal executive offices)
(zip code)
(770) 419-3355
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO ____
The number of shares of common stock, par value $0.01 per share, outstanding at
May 9, 2000 was 12,341,696.
1234602v1
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Part I - FINANCIAL INFORMATION
Item 1. Financial statements
CRYOLIFE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
March 31,
-------------------------
2000 1999
-------------------------
(Unaudited)
<S> <C> <C>
Revenues:
Preservation services and products $ 19,481 $ 16,059
Research grants and licenses 142 266
-------------------------
19,623 16,325
Costs and expenses:
Preservation services and products 9,149 7,371
General, administrative and marketing 7,043 6,170
Research and development 1,329 1,074
Interest expense 100 119
Interest income (377) (425)
Other income, net (15) (44)
-------------------------
17,229 14,265
-------------------------
Income before income taxes 2,394 2,060
Income tax expense 790 680
-------------------------
Net income $ 1,604 $ 1,380
=========================
Earnings per share:
Basic $ 0.13 $ 0.11
=========================
Diluted $ 0.13 $ 0.11
=========================
Weighted average shares outstanding:
Basic 12,238 12,497
Diluted 12,525 12,680
See accompanying notes to summary consolidated financial statements.
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2
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Item 1. Financial Statements
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CRYOLIFE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
March 31, December 31,
2000 1999
------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 5,915 $ 6,128
Marketable securities, at market 24,345 24,403
Receivables (net) 13,123 12,333
Deferred preservation costs (net) 18,188 17,652
Inventories 4,636 4,597
Prepaid expenses 1,751 1,454
Deferred income taxes 1,435 983
------------------------------
Total current assets 69,393 67,550
------------------------------
Property and equipment (net) 19,226 18,674
Goodwill (net) 1,566 1,590
Patents (net) 2,399 2,363
Other (net) 2,401 2,449
Deferred income taxes 1,012 1,399
------------------------------
TOTAL ASSETS $ 95,997 $ 94,025
==============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,381 $ 975
Accrued expenses 936 2,145
Accrued procurement fees 3,557 2,874
Accrued compensation 1,243 1,161
Income taxes payable 773 ---
Current maturities of capital lease
obligations 163 180
Current maturities of long-term debt 287 287
------------------------------
Total current liabilities 8,340 7,622
------------------------------
Capital lease obligations, less
current maturities 1,455 1,534
Convertible debenture 4,393 4,393
Other long-term debt 250 250
------------------------------
Total liabilities 14,438 13,799
------------------------------
Shareholders' equity:
Preferred stock --- ---
Common stock (issued 13,426 shares in
2000 and 13,361 shares in 1999) 133 134
Additional paid-in capital 64,092 64,425
Retained earnings 25,168 23,564
Deferred compensation (54) (57)
Unrealized gain on marketable securities (871) (783)
Translation adjustment (3) (2)
Less: Treasury stock (1,134 shares in
2000 and in 1999) (6,906) (7,055)
------------------------------
Total shareholders' equity 81,559 80,226
------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 95,997 $ 94,025
==============================
See accompanying notes to summary consolidated financial statements.
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3
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Item 1. Financial Statements
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<CAPTION>
CRYOLIFE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Three Months Ended
March 31,
------------------------------
2000 1999
------------------------------
(Unaudited)
<S> <C> <C>
Net cash from operating activities:
Net income ............................................................. $ 1,604 $ 1,380
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Deferred income recognized ..................................... -- (193)
Gain on sale of marketable securities .......................... (132) --
Depreciation and amortization .................................. 782 686
Provision for doubtful accounts ................................ 24 24
Deferred income taxes .......................................... (19) 25
Changes in operating assets and liabilities:
Receivables ............................................ (814) (2,046)
Deferred preservation costs and inventories ............ (575) (777)
Prepaid expenses and other assets ...................... (297) (556)
Accounts payable and accrued expenses .................. 735 (780)
Net cash provided by (used in) operating activities ............ 1,308 (2,237)
Net cash flows from investing activities:
Capital expenditures ................................................... (1,287) (963)
Other assets ........................................................... (11) (200)
Purchases of marketable securities ..................................... (2,714) (6,863)
Sales of marketable securities ......................................... 2,770 6,932
Net cash used in investing activities .................................. (1,242) (1,094)
Net cash flows from financing activities:
Principal payments of debt ............................................. -- (263)
Payment of obligations under capital leases ............................ (96) (54)
Purchase of treasury stock ............................................. (612) (1,259)
Proceeds from exercise of stock options and
issuance of common stock .............................................. 430 129
Net cash used in financing activities .................................. (278) (1,447)
Decrease in cash .............................................................. (212) (4,778)
Effect of exchange rate changes on cash ........................................ (1) --
Cash and cash equivalents, beginning of period ................................. 6,128 12,885
Cash and cash equivalents, end of period ....................................... $ 5,915 $ 8,107
See accompanying notes to summary consolidated financial statements.
</TABLE>
4
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CRYOLIFE, INC.
NOTES TO SUMMARY CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The accompanying unaudited, condensed, consolidated financial statements have
been prepared in accordance with (i) generally accepted accounting principles
for interim financial information, and (ii) the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
March 31, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000. For further information, refer
to the consolidated financial statements and footnotes thereto included in the
Company's Form 10-K for the year ended December 31, 1999.
Note 2 - Investments
The Company maintains cash equivalents and investments in several large
well-capitalized financial institutions, and the Company's policy disallows
investment in any securities rated less than "investments-grade" by national
rating services.
Management determines the appropriate classification of debt securities at the
time of purchase and reevaluates such designations as of each balance sheet
date. Debt securities are classified as held-to-maturity when the Company has
the positive intent and ability to hold the securities to maturity.
Held-to-maturity securities are stated at amortized cost. Debt securities not
classified as held-to-maturity or trading, and marketable equity securities not
classified as trading, are classified as available-for-sale. Available-for-sale
securities are stated at their fair values, with the unrealized gains and
losses, net of tax, reported in a separate component of shareholders' equity.
The amortized cost of debt securities classified as available-for-sale is
adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in investment income. Realized gains and losses
and declines in value judged to be other than temporary on available-for-sale
securities are included in investment income. The cost of securities sold is
based on the specific identification method. Interest and dividends on
securities classified as available-for-sale are included in interest income. At
March 31, 2000 all marketable equity securities and debt securities held by the
Company were designated as available-for-sale.
The gross realized gains on sales of available-for-sale securities totaled $0
and $77,000 in the first quarters of 2000 and 1999, respectively. As of March
31, 2000 differences between cost and market of $1,320,000 (less deferred taxes
of $449,000) are included as a separate component of shareholders' equity.
At March 31, 2000 and December 31, 1999 approximately $3.7 million and $4.1
million, respectively, of debt securities with original maturities of 90 days or
less at their acquisition dates were included in cash and cash equivalents. At
March 31, 2000 and December 31, 1999 no investments had a maturity date between
90 days and 1 year and approximately $15.9 million of investments matured
between one and five years.
5
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Note 3 - Inventory
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Inventories are comprised of the following:
(Unaudited)
March 31, December 31,
2000 1999
-----------------------------------------
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Raw materials $ 1,617,000 $ 1,555 ,000
Work-in-process 838,000 578,000
Finished goods 2,180,000 2,464,000
-----------------------------------------
$ 4,636,000 $ 4,597,000
=========================================
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Note 4 - Earnings per Share
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<CAPTION>
The following table sets forth the computation of basic and diluted earnings per
share:
Three Months Ended
March 31,
-----------------------------------
2000 1999
-----------------------------------
(Unaudited)
<S> <C> <C>
Numerator for basic and diluted
earnings per share - net income $ 1,604,000 $ 1,380,000
===================================
Denominator for basic earnings per share
- weighted-average basis 12,238,000 12,497,000
Effect of dilutive stock options 287,000 183,000
------------------------------------
Denominator for diluted earnings per share
- adjusted weighted-average shares 12,525,000 12,680,000
====================================
Earnings per share:
Basic $ .13 $ .11
====================================
Diluted $ .13 $ .11
====================================
</TABLE>
Note 5 - Comprehensive Income
During the periods ended March 31, 2000 and 1999, net comprehensive income was
less than net income by approximately $88,000 and $102,000, respectively, due to
unrealized losses on marketable equity securities.
6
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PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
Preservation and product revenues increased 20% to $19.5 million for the three
months ended March 31, 2000 from $16.1 million for the same period in 1999. The
increase in revenues was primarily due to the growing acceptance in the medical
community of cryopreserved tissues which has resulted in increased demand for
the Company's cryopreservation services, the Company's ability to procure
greater amounts of tissue, revenues attributable to the Company's introduction
of BioGlue Surgical Adhesive in domestic markets in January of 2000, increased
product awareness since the introduction of BioGlue in international markets in
April 1998 and other reasons discussed below.
Revenues from human heart valve and conduit cryopreservation services increased
11% to $7.6 million for the three months ended March 31, 2000 from $6.8 million
for the three months ended March 31, 1999, representing 39% and 42%,
respectively, of total revenues during such periods. This increase was primarily
due to a 15% increase in the number of heart allograft shipments for the three
months ended March 31, 2000. The increase in the number of heart allograft
shipments primarily results from the Company's ability to procure greater
amounts of tissue and an increase in shipments of pulmonary heart valves which
results from an increase in the number of Ross procedures being performed. In a
Ross procedure, the patient's pulmonary valve is transplanted into the aortic
position and a human pulmonary allograft is transplanted into the patient's
pulmonary position.
Revenues from human vascular tissue cryopreservation services increased 14% to
$5.6 million for the three months ended March 31, 2000 from $4.9 million for the
three months ended March 31, 1999, representing 28% and 30%, respectively, of
total revenues during such periods. This increase in revenues was primarily due
to a 20% increase in the number of vascular allograft shipments for the three
months ended March 31, 2000 due to an increased demand for saphenous vein, the
Company's ability to procure greater amounts of tissue and the growth in demand
for the Company's cryopreserved femoral vein for dialysis access.
Revenues from human connective tissue cryopreservation services increased 64% to
$3.9 million for the three months ended March 31, 2000 from $2.4 million for the
three months ended March 31, 1999, representing 20% and 15%, respectively, of
total revenues during such periods. This increase in revenues was primarily due
to a 56% increase in the number of allograft shipments for the three months
ended March 31, 2000 due to increased demand and the Company's ability to
procure greater amounts of tissue. Additional revenue increases have resulted
from a greater proportion of the 2000 shipments consisting of preserved
osteoarticular grafts, which have a significantly higher per unit revenue than
the Company's cryopreserved menisci and tendons.
Revenues from Ideas for Medicine, Inc. ("IFM") decreased 31% to $1.1 million for
the three months ended March 31, 2000 from $1.6 million for the three months
ended March 31, 1999, representing 6% and 10%, respectively, of total revenues
during such periods. The IFM product line was sold to Horizon Medical Products,
Inc. ("HMP") on September 30, 1998. In October 1998 IFM began an OEM
manufacturing agreement with HMP which provides for the manufacture by IFM of
specified minimum dollar amounts of IFM products to be purchased exclusively by
the purchaser of the IFM product line over each of the four years following the
sale.
The Company recorded a nonrecurring charge of $2.4 million in 1999 primarily as
a result of HMP's default on its manufacturing contract with IFM. On June 22,
1999 IFM notified HMP that it was in default of certain provisions of the
Agreement. After notification of the default, HMP indicated to the Company that
it would not be able to meet and has not met the minimum purchase requirements
outlined in the Agreement. The Company has been and continues to negotiate with
HMP in order to reach a mutually agreeable solution to the default.
7
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Revenues from BioGlue (R) surgical adhesive increased 345% to $1.1 million for
the three months ended March 31, 2000 from $254,000 for the three months ended
March 31, 1999, respectively. This increase in revenues is due to a 235%
increase in the number BioGlue milliliter shipments due to increased product
awareness since the introduction of BioGlue in international markets in April of
1998, increased surgeon training, the receipt of the CE approval for pulmonary
indications in Europe in March 1999, and the introduction of BioGlue in domestic
markets in January of 2000 pursuant to a Humanitarian Use Device Exemption for
the use of BioGlue as an adjunct in the repair of acute thoracic aortic
dissections.
Revenues from bioprosthetic cardiovascular devices were $226,000 and $200,000
for the three months ended March 31, 2000 and 1999, representing 1% of total
revenues during each such periods.
Grant revenues decreased to $142,000 for the three months ended March 31, 2000
from $266,000 for the three months ended March 31, 1999. Grant revenues are
primarily attributable to the SynerGraft (R) research and development programs.
Cost of cryopreservation services and products aggregated $9.1 million for the
three months ended March 31, 2000, compared to $7.4 million for the
corresponding period in 1999, representing 47% and 46% of total cryopreservation
and product revenues in each period. The increase in the 2000 cost of
cryopreservation services and products as a percentage of revenues results from
a lesser portion of 2000 revenues being derived from human heart valve and
conduit cryopreservation services, which carry significantly higher gross
margins than other cryopreservation services, and from the switch in October of
1998 to OEM manufacturing of single-use medical devices, which generates lower
gross margins than cryopreservation services and lower gross margins than the
IFM products generated prior to the sale of the IFM product line.
General, administrative and marketing expenses increased 14% to $7 million for
the three months ended March 31, 2000, compared to $6.2 million for the
corresponding period in 1999, representing 36% and 38% of total preservation and
product revenues in each period. The increase in expenditures in 2000 resulted
from expenses incurred to support the increase in revenues and expenses
associated with the establishment of the Company's European headquarters.
Research and development expenses were $1.3 million for the three months ended
March 31, 2000, compared to $1.1 million for the three months ended March 31,
1999, representing 7% of total cryopreservation and product revenues for each
period. Research and development spending relates principally to the Company's
ongoing human clinical trials for its BioGlue surgical adhesive and to its focus
on its SynerGraft technologies.
Net interest income was $377,000 and $425,000 for the three months ended March
31, 2000 and 1999, respectively.
8
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Seasonality
The demand for the Company's human heart valve and conduit cryopreservation
services is seasonal, with peak demand generally occurring in the second and
third quarters. Management believes this demand trend for human heart valve and
conduit cryopreservation services is primarily due to the high number of
surgeries scheduled during the summer months. Management believes the trends
experienced by the Company to date for its human connective tissue for the knee
cryopreservation services indicate this business may also be seasonal because it
is an elective procedure which may be performed less frequently during the
fourth quarter holiday months. However, the demand for the Company's vascular
tissue cryopreservation services, bioprosthetic cardiovascular devices, and
BioGlue surgical adhesive does not appear to experience this seasonal trend.
Liquidity and Capital Resources
At March 31, 2000, net working capital was $61.1 million, compared to $59.9
million at December 31, 1999, with a current ratio of 8-to-1 at March 31, 2000.
The Company's primary capital requirements arise out of general working capital
needs, capital expenditures for facilities and equipment and funding of research
and development projects and a common stock repurchase plan approved by the
Board of Directors in October of 1998. The Company historically has funded these
requirements through bank credit facilities, cash generated by operations and
equity offerings.
Net cash provided by operating activities was $1.3 million for the three months
ended March 31, 2000, as compared to net cash used in operating activities of
$2.2 million for the three months ended March 31, 1999. This increase primarily
resulted from a reduction in the increase in accounts receivables despite
increased revenues and a decrease in the amount of accounts payable liquidated
in the first quarter of 2000 as compared to the first quarter of 1999 due to
expenses associated with the BioGlue manufacturing laboratory.
Net cash used in investing activities was $1.2 million for the three months
ended March 31, 2000, as compared to $1.1 million for the three months ended
March 31, 1999. Investing activities primarily consist of property and equipment
additions.
Net cash used in financing activities was $278,000 for the three months ended
March 31, 2000, as compared to net cash used in financing activities of $1.4
million for the three months ended March 31, 1999. This decrease was primarily
attributable to a reduction in the Company's repurchase of treasury stock during
the first quarter of 2000 coupled with an increase in proceeds from stock option
exercises.
Management is currently seeking to complete a potential private placement of
equity or equity-oriented securities to form a subsidiary company for the
commercial development of its serine proteinase light activation technologies.
This strategy, if successful, will allow an affiliated entity to fund the light
activation technology and should expedite the commercial development of its
blood clot dissolving and surgical sealant product applications without
additional research and development expenditures by the Company (other than
through the affiliated company). This strategy, if successful, will favorably
impact the Company's liquidity going forward. The Company has ceased further
development of light activation technology pending the identification of a
corporate partner to fund future development. The Company began its search for a
corporate partner in October 1998.
9
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The Company anticipates that the remaining net proceeds from its 1998 follow-on
equity offering (the "Offering") of 2,975,500 new shares of its common stock
resulting in net proceeds of approximately $45 million, $11 million of bank
credit facilities and cash generated from operations will be sufficient to meet
its operating and development needs for the next 12 months. However, the
Company's future liquidity and capital requirements beyond that period will
depend upon numerous factors, including the timing of the Company's receipt of
FDA approvals to begin clinical trials for its products currently in
development, the resources required to further develop its marketing and sales
capabilities if, and when, those products gain approval, the resources required
to expand manufacturing capacity and the extent to which the Company's products
generate market acceptance and demand. There can be no assurance that the
Company will not require additional financing or will not seek to raise
additional funds through bank facilities, debt or equity offerings or other
sources of capital to meet future requirements. These additional funds may not
be available when needed or on terms acceptable to the Company, which
unavailability could have a material adverse effect on the Company's business,
financial condition and results of operations.
Forward-Looking Statements
Statements made in this Form 10-Q for the quarter ended March 31, 2000 that
state the Company's or management's intentions, hopes, beliefs, expectations or
predictions of the future are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. It is important to note
that the Company's actual results could differ materially from those contained
in such forward-looking statements as a result of adverse changes in any of a
number of factors that affect the Company's business, including without
limitation, changes in (1) the Company's ability to find an equity investor in
the FibRx technology and the impact of such an investment on the Company's
liquidity, (2) the adequacy of the Company's financing arrangements over the
next twelve months, (3) the outcome of the ongoing discussions with HMP and, (4)
governmental or third-party reimbursement policies. See the "Business-Risk
Factors" section of the Company's Annual Report on Form 10-K for the year ended
December 31, 1999 for a more detailed discussion of factors which might affect
the Company's future performance.
Item 3. Qualitative and Quantitative Discussion About Market Risk.
The Company's interest income and expense are most sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in U.S. interest
rates affect the interest earned on the Company's cash equivalents of $4.1
million and short-term investments of $15.9 million in municipal obligations as
of March 31, 2000 as well as interest paid on its debt. To mitigate the impact
of fluctuations in U.S. interest rates, the Company generally maintains
approximately 50% of its debt as fixed rate in nature. As a result, the Company
is subject to a risk that interest rates will decrease and the Company may be
unable to refinance its debt.
10
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Part II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other information.
None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibit index can be found below.
Exhibit
Number Description
3.1 Restated Certificate of Incorporation of the Company. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1999.)
3.2 ByLaws of the Company, as amended. (Incorporated by reference to
Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995.)
4.1 Form of Certificate for the Company's Common Stock. (Incorporated by
reference to Exhibit 4.1 to the Registrant's Registration Statement on
Form S-1 (No. 33-56388).)
4.2 Form of Certificate for the Company's Common Stock. (Incorporated by
reference to Exhibit 4.2 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1997).
27.1* Financial Data Schedule
- --------------
* Filed herewith.
(b) Current Reports on Form 8-K.
None
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CRYOLIFE, INC.
(Registrant)
May 12, 2000 /s/ DAVID ASHLEY LEE
- ------------------ ----------------------------------
DATE DAVID ASHLEY LEE
Vice President and Chief Financial
Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET OF CRYOLIFE, INC. AS OF MARCH 31, 2000 AND
THE RELATED UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000784199
<NAME> CRYOLIFE, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 5,915,000
<SECURITIES> 24,345,000
<RECEIVABLES> 13,123,000
<ALLOWANCES> 552,000
<INVENTORY> 4,636,000
<CURRENT-ASSETS> 69,393,000
<PP&E> 31,802,000
<DEPRECIATION> 12,576,000
<TOTAL-ASSETS> 95,997,000
<CURRENT-LIABILITIES> 8,340,000
<BONDS> 6,548,000
0
0
<COMMON> 133,000
<OTHER-SE> 81,426,000
<TOTAL-LIABILITY-AND-EQUITY> 95,997,000
<SALES> 2,578,000
<TOTAL-REVENUES> 19,623,000
<CGS> 1,987,000
<TOTAL-COSTS> 9,149,000
<OTHER-EXPENSES> 7,980,000
<LOSS-PROVISION> 24,000
<INTEREST-EXPENSE> 100,000
<INCOME-PRETAX> 2,394,000
<INCOME-TAX> 790,000
<INCOME-CONTINUING> 1,604,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,604,000
<EPS-BASIC> .13
<EPS-DILUTED> .13
</TABLE>
